Week Ahead

Next week the US will be publishing inflation rate, retail sales, industrial production and the preliminary reading of Michigan consumer sentiment. Elsewhere, other important releases include: UK Q4 GDP growth, alongside inflation, retail trade and industry and construction output; Germany and Japan Q4 GDP growth rates; and China foreign trade, inflation and producer prices. Investors will also react to US-China trade talks and will see if the impasse over border security funding can be solved in the US Congress to avoid a second partial shutdown.

In the US the highly anticipated consumer price index report for January will probably show a decline in inflation to over two-year low of 1.5 percent from December's 1.9 percent on lower energy prices, while the core inflation is set to edge down to 2.1 percent from 2.2 percent. In addition, the preliminary reading of Michigan consumer sentiment is expected to show a slight improvement in consumer morale after it hit an over two-year low in January following the recently ended five-week partial shutdown of the federal government. December's retail sales report is likely to show a 0.2 percent growth in sales, the same as in November; while industrial output expansion is set to ease to 0.1 percent in January from 0.3 percent a month earlier. Figures for JOLTs job openings, producer and foreign trade prices, business inventories, NY Empire State Manufacturing Index, capital flows and government budget statement will also be keenly watched. Also, temporary funding for several US federal agencies expires on February 15th and investors await to see if the impasse over border security funding can be solved in the Congress to avoid a second partial shutdown.

The UK will publish its preliminary estimate of fourth-quarter GDP growth, alongside business investment, consumer and producer inflation rates, retail sales, trade balance, industrial production and construction output. Growth forecasts point to a 0.3 percent expansion in the last three months of the year amid continuing Brexit uncertainty, well below the 0.6 percent advance recorded in the previous period.

Elsewhere in Europe, several countries including Germany will publish preliminary estimates of fourth-quarter GDP growth while the Eurozone is set to provide a second estimate of its economic performance during the same period. The bloc's largest economy is seen growing a meager 0.1 percent, after contracting for the first time since Q1 2015 during the previous period amid declines in both exports and household consumption. In addition, investors will keep an eye on the Eurozone industrial production, trade balance and employment change; France Q4 jobless rate; Sweden interest rate decision; Switzerland inflation; and Turkey unemployment.

China will be publishing January's trade figures with markets expecting a fall in both exports and imports amid ongoing trade tensions with the US. Other important releases include foreign direct investment, vehicle sales, producer prices and inflation rate, which is expected to pick up to 2 percent in January from a six-month low in December. Meanwhile in Japan investors will focus on Q4 preliminary GDP growth, as markets point to an expansion in the economy after shrinking in the third quarter as natural disasters hit consumption and investment. Japan will also be providing updated figures for producer prices and industrial production. Other highlights for the Asia-Pacific region include: Australia NAB Business Confidence, Westpac Consumer Confidence; New Zealand interest rate decision; India trade balance, industrial output and consumer and wholesale prices; and Malaysia Q4 GDP growth.

US-China trade talks will also be in the spotlight in the coming week on hopes that the world's largest economies could reach an agreement to avert a further increase in US tariffs on Chinese goods. Investors will also focus on OPEC's monthly report.